8-K: Biote Corp. Reports Mixed Q4 and Full Year 2023 Results, Announces Share Repurchase Program

Biote Corp. announced its fourth quarter and full year 2023 financial results, highlighting revenue growth, increased gross profit margins, and a strategic share repurchase program.

Summary

• Biote Corp. reported a 2.7% increase in revenue for the fourth quarter of 2023, reaching $45.7 million, and a 12.4% increase for the full year, totaling $185.4 million.
• The company's procedure revenue saw a 6.6% increase in Q4 and a 9.3% increase for the full year.
• Gross profit margin improved to 69.4% in Q4 and 68.8% for the full year.
• Net income for Q4 was $12.1 million, while the full year resulted in a net loss of $2.8 million.
• Adjusted EBITDA was $13.6 million for Q4 and $55.3 million for the full year.
• Biote's practitioner network grew to over 7,100, up from 6,400 in 2022.
• The company launched BioteRx, a new line of hormone and therapeutic wellness products.
• Biote has agreed to repurchase 18.4 million founder's shares and has initiated a separate $20 million share repurchase program.
• The company reaffirmed its 2024 financial guidance, projecting revenue between $200 and $204 million and adjusted EBITDA between $60 and $63 million.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive due to solid revenue growth, improved gross margins, and strategic share repurchases. However, the full-year net loss and some challenges in the dietary supplement segment temper the overall optimism.

Positives

• Revenue increased both in the fourth quarter and for the full year, indicating growth in the business.
• Gross profit margins improved significantly, suggesting better cost management and product mix.
• The company's practitioner network continues to expand, increasing the reach of their services.
• The launch of BioteRx introduces new revenue streams and product offerings.
• The share repurchase programs are expected to enhance shareholder value.
• The company reaffirmed its 2024 financial guidance, indicating confidence in future performance.

Negatives

• Dietary supplement revenue declined by 14.6% in the fourth quarter due to a distributor exiting the business.
• Operating income decreased in the fourth quarter due to higher expenses, primarily for professional services.
• The company reported a net loss of $2.8 million for the full year, despite a profitable fourth quarter.
• Full year net loss was impacted by significant stock compensation and legal expenses.

Risks

• The company's reliance on third parties for manufacturing bio-identical hormones poses a supply chain risk.
• Regulatory, economic, and competitive conditions could impact the company's performance.
• The company faces significant competition in the hormone optimization industry.
• The company's ability to expand into new markets and increase practitioner adoption of the Biote Method is not guaranteed.
• The company's future performance is subject to various economic, business, and competitive factors, including potential bank failures and changes in exchange and interest rates.
• The company's 2024 revenue growth is expected to be impacted by the transition in the nutraceutical distribution channel and timing of seasonal promotions.

Future Outlook

The company anticipates solid financial performance in 2024, with stronger revenue growth expected in the second half of the year. They project revenue between $200 and $204 million and adjusted EBITDA between $60 and $63 million for 2024.

Management Comments

• Terry Weber, Biote Chief Executive Officer, stated that fourth quarter procedure revenue increased approximately 6.6%, reflecting stability for our hormone optimization therapies.
• Ms. Weber also mentioned that the company continued to expand its nationwide network, growing the net number of Biote-certified practitioners to more than 7,100.
• Ms. Weber noted that the company reached a settlement with Dr. Gary S. Donovitz, Biote's founder, to resolve protracted and costly litigation.
• Ms. Weber stated that the company believes the repurchase of founder's shares will be accretive to shareholder value.
• Ms. Weber mentioned that the company continues to effectively address the large and underserved market for hormone optimization.
• Ms. Weber stated that initial provider feedback on the new BioteRx products has been positive, strengthening the company's conviction in the growth opportunity.

Industry Context

This announcement comes as the preventive health and wellness market continues to grow, with increasing consumer interest in personalized hormone optimization and therapeutic solutions. Biote's expansion of its practitioner network and product offerings positions it to capitalize on this trend, while the share repurchase program signals confidence in the company's future prospects.

Comparison to Industry Standards

• Biote's revenue growth of 12.4% for the full year is solid compared to other companies in the health and wellness sector, although specific comparisons are difficult without detailed competitor data.
• The gross profit margin of 68.8% is strong, indicating efficient cost management and a favorable product mix, which is a key metric for profitability in the healthcare industry.
• The adjusted EBITDA margin of 29.8% is also competitive, suggesting that Biote is effectively managing its operating expenses.
• Companies like Thorne HealthTech (THRN) and LifeMD (LFMD) also operate in the wellness and telehealth space, but their specific financial metrics and business models differ, making direct comparisons challenging.
• Biote's focus on hormone optimization and a network of certified practitioners is a unique approach compared to some competitors that focus more on direct-to-consumer sales or broader wellness offerings.

Legal Proceedings

• Biote reached a settlement with its founder, Dr. Gary S. Donovitz, to resolve protracted and costly litigation.

Stakeholder Impact

• Shareholders will benefit from the share repurchase programs and the potential for increased value.
• Practitioners will have access to new products and training opportunities.
• Patients will have access to a wider range of hormone optimization and therapeutic wellness solutions.
• Employees may be impacted by the company's growth and strategic initiatives.

Next Steps

• The company will continue to execute on its strategy, focusing on expanding its practitioner network and product offerings.
• Biote will continue the phased launch of its new BioteRx hormone and therapeutic wellness products.
• The company will proceed with the share repurchase programs.
• Biote management will host a conference call to review the results and provide a business update.

Key Dates

Keywords

hormone optimization, therapeutic wellness, biote, practitioner network, share repurchase, financial results, adjusted EBITDA, revenue growth, gross profit margin, BioteRx